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    Published on: October 22, 2009

    Now available on iTunes…

    To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.

    This week I had the opportunity to moderate the NACS International Forum in Las Vegas, and heard a series of thought-provoking presentations that pointed to one inescapable truth - the convenience store industry is going through a process of self-examination that is likely to lead to a kind of accelerated evolution in this segment of the business. What they are doing is very smart - they are looking not just at critical issues, but are working to help attendees connect the dots among them.

    For example, the Forum I moderated essentially looked at two subjects that would be on any retail agenda - store design and customer knowledge - and used the concept of developing a global mindset as a kind of prism through which they should be seen.

    I don’t think it can be argued that we give and work in a more global environment than ever. There may be people out there who think that they have only a homogeneous group of suppliers and/or customers to deal with, but they’d be wrong. Or at least ignorant. Even people who look alike and sound alike reflect a more varied and global experience simply because they are exposed to more because of the Internet and the media. And whether you agree with his policies and politics or not, the election just a year ago of Barack Obama can be seen as proof positive that many young people do not have the biases and prejudices of their elders. (To be fair, there will be those who would argue they also lack the good sense of their elders, but that is a discussion for another place and time.)

    The world may be flat, said Dr. David Bowen of the Thunderbird School of Global Management, but it also is bumpy...because for many people developing a global mindset can be a painful experience...though also, when successful, a transformational one.

    But here’s one of the more sobering pieces of news delivered by Dr. Bowen. It seems that they’ve actually done research on people to see when they are best able to develop a more global view of the world. It is easier for people to do so up to the age of 40, very difficult between the ages of 40 and 65, and easier again after 65. Which makes sense, because in general people tend to be more open minded when they are younger, get more conservative at a certain age when they think they have more to protect, and it seems entirely logical that at a certain point they might get to a kind of “what the hell” phase of life.

    Here’s what’s scary about that. As Dr. Bowen pointed out, most business leaders and managers are between the ages of 40 and 65.

    In other words, at the very time that they are responsible for developing strategies and tactics that will propel their companies into the coming decades, they actually are least likely to have the mindset necessary to do so.

    Is this impossible to overcome? Of course not. But in today’s world, which seems both small and interconnected while at the same time being more complex and confusing than ever before, we cannot afford to ignore these tendencies. Smart people - people who are leaders - do battle with their own prejudices and biases every day. Before leaders challenge anyone else to do better, they challenge themselves.

    It is, in fact, one of the differences between leaders and mere managers. We just have to decide which we want to be, and then go after it. Every day.

    For MorningNewsBeat Radio, I’m Kevin Coupe.
    KC's View:

    Published on: October 22, 2009

    Walmart said yesterday that it plans to “offer weekly deep savings events and new everyday low prices on thousands of items across the store, starting today through the holiday period. Each week, Walmart will announce new pricing reductions, beginning with select items in groceries and entertainment.”

    "Many of these prices represent the lowest we've offered in years, because we know these are tough times for American families," said Eduardo Castro-Wright, vice chairman, Walmart Stores, Inc. "We made a purposeful decision to focus initially on everyday staples as well as items that often require larger spending commitments in preparation for Thanksgiving and Christmas."
    KC's View:
    Walmart’s making a lot of news lately. It goes after Amazon on book prices. It announces a new initiative for small store development. And now, there’s this price cutting move, which was predictable but should also scare its competitors.

    Like the one in our next story...

    Published on: October 22, 2009

    The Wall Street Journal reports that Supervalu CEO Craig Herkert “plans to double the size of the underperforming grocer's discount chain Save-A-Lot to about 2,400 stores over five years,” which he told analysts “is not an abandonment of traditional grocery; this is an acceleration of Save-A-Lot.” The Save-A-Lot format is similar to that of the fast-growing Aldi chain - it uses a small box to ell about 3,000 mostly private label items, offering no service and limited hours.

    According to the story, “Supervalu has struggled to capitalize on its national scale since it acquired more than 1,100 Albertson's stores in 2006. A more centralized purchasing structure for the chain's 2,500 stores and the 1,800 supermarkets it supplies as a wholesaler should drive down nondiscounted, or everyday, prices of national-branded items. Mr. Herkert called the disparity between discounted and nondiscounted prices ‘out of whack’.”

    Herkert, a former Walmart executive who moved over to Supervalu earlier this year, told the analysts: "Times are tough ... but we cannot and will not use the overall economy as an excuse. Supervalu must transform itself into a business that is customer focused, dynamic and agile enough to meet the evolving needs of customers, whatever the environment. Clearly we have not done that recently ... My sense is the American consumer's shopping habits have changed probably forever, certainly for a long time, and I don't think we are going to wake up in a few months and everybody will be back to 2006.”
    KC's View:
    The rumblings one tends to hear about Supervalu tend to focus more on the likelihood that the company is going to sell off one or more of its banners, and that the company’s new CEO is very focused on the value-driven brands that he thinks will allow the company to better compete long term.

    The question is whether this strategy will work in the long term, or if he fighting a battle against the Bentonville Behemoth that he cannot win.

    Published on: October 22, 2009

    While the city of San Francisco has led the way with its ban on plastic shopping bags, it now is going where no municipality has gone before - the consideration of a new bill that would ban the use of paper bags by grocery stores and drug stores.

    The legislation was introduced this week by city Supervisor Ross Mirkarimi, who said that the move would save at least some of the millions of trees cut down annually to make paper bags.

    The bill does not just ban paper bags; it also requires that people who bring in their own reusable bags be given a 10 cent discount for each bag used.
    KC's View:
    Even for someone like me, who wholeheartedly believes in reusable shopping bags and takes them everywhere, this bill seems a little over the top. I’m not even sure why...but all this regulation does seem to get a little excessive.

    Published on: October 22, 2009

    Business Week reports that despite the fact that retailers have spent years of effort and millions of dollars to convince the US Congress to legislate against what they believe are extravagant and outrageous interchange fees on credit card transactions, they seem to be getting relatively little traction.

    In part, it is because the Congress and the Obama administration have been preoccupied with other issues, such as health care and other finance-oriented legislation that seem to have become greater priorities. In addition, the card companies have been doing their own lobbying, arguing that any legislation would restrict their ability to offer credit card services during a time when credit already is tight.
    KC's View:
    I’m not buying the credit card companies’ argument at all. They are gouging consumers and using retailers to do it.

    What I don;t understand is why Congress and the Obama administration don’t move this up the priority list. Seems like a fairly easy and logical win - for consumers, at least, who also happen to be voters - at a time when they could use one.

    But I suppose that politics make everything difficult. (How’s that for a pithy and revelatory observation...?)

    Published on: October 22, 2009

    USA Today has a story about a new Institutes of Medicine report saying that a change in school lunch programs to emphasize more fruits and vegetables, limiting salt and calories, and offering one percent and skim milk instead of the whole variety, would have a discernible impact on kids’ overall health.

    The report notes that 31 million children eat lunch at school each day, while 10 million eat breakfast. While the report concedes that such a move would cost more, it suggests that the long term health impact would be positive and even financially advantageous.

    The USA Today story says that the report now goes to the US Congress, where it is hoped that it will be used as a guideline in creating new legislation.
    KC's View:
    Anything that can be done to get ride of the slop that gets served in so many US public schools would be a positive move, and I’ll buy the argument that the long-term financial impact would be positive...though clearly there would be some short-term pain that a lot of people will find difficult to advocate because of the recession.

    And, as I’ve said here before, I think that supermarkets can play a role in this kind of movement. It is a natural position to take, and can be a great way to create a positive local image in communities.

    That said, there’s a part of me that is really tired of all the debate about the obesity crisis in America and elsewhere. That may be politically incorrect to say, but it is a fact…in part because so much of the discussion is strident, with people stating positions and then refusing to listen to other sides. There’s talk about taxes and fines and bans and labeling and the nanny state and the notion of personal accountability…but I think there is a dysfunctionality to the debate because a lot of these issues are being discussed in a series of vacuums. People aren’t connecting the dots, and so we don't get a clear picture, don't have a clear sense of the map that will take us in a more healthful direction.

    Should soft drinks be banned in schools, or should they be taxed as a way of diminishing consumption? Well, I understand the argument for such steps, but it doesn’t really make any sense if schools don't teach kids about nutrition and health, if schools don't offer regular gym classes that help them understand the long-term physical and mental benefits of regular exercise. It also doesn’t make sense unless parents are of the same mind, because at home is where the most important lessons are taught.

    The connections have to be made. More than band-aids have to be applied. If we’re going to fix the school lunch program, it had better be in the context of larger reforms.

    Published on: October 22, 2009

    NACS Chairman Hank Armour announced two new initiatives at the annual NACS Show in Las Vegas yesterday.

    The trade association is launching the NACS Center for Achieving Foodservice Excellence, also known as the NACS CAFE, as well as a NACS advocacy campaign that will integrate industry and consumer frustration over credit card interchange fees in order to achieve congressional action.

    NACS CAFE, which debuts in early 2010, will “provide certified training programs for foodservice managers, supervisors and corporate directors through a series of online computer-based training modules and on-campus educational programs, as well as through a Web-based resource center,” the association said.

    As for the interchange fee-related initiative, Armour pointed out that “successful political action requires two things: skillful lobbying on Capitol Hill and dramatic grassroots activity. We now need to light grassroots fire around the country.” The goal is to get customers to speak out over credit card interchange fees via a new petition campaign, similar to those that have already resulted in millions of signatures at 7-Eleven and Circle K stores, Armour told attendees.
    KC's View:
    The NACS CAFE is really interesting...especially because it signals to other companies in the retail food business that c-stores are serious about making a play in this segment.

    Published on: October 22, 2009

    Bloomberg reports that Walmart may be considering an entry into the South Africa market. The speculation came after Pick n Pay CEO Nick Badminton revealed that he’d met with Walmart representatives as a “courtesy.”
    KC's View:

    Published on: October 22, 2009

    The Kroger Co. announced yesterday that Kathleen S. Barclay has been named senior vice president of Human Resources. Barclay, a 30-year veteran of the HR game, most recently has run Global Human resources for General Motors Corp. The appointment is effective in January 2010.
    KC's View:

    Published on: October 22, 2009

    Yesterday, Kate McMahon wrote scathingly about a new iPhone application created for Pepsi’s Amp energy drink, which tells guys how to score with 24 “types” – such as Sorority Girl, Cougar, Rebound Chick and Goth – and provides pickup lines and links to resources for the effort. The app then gives them options for posting information about their conquests online.

    In Kate’s column, she reported on the outrage that greeted the app, and that while pepsi did issue an apology, it did not pull the application off the Internet. She called it boorish and offensive...and I called it vile.

    One MNB user responded:

    While I might not agree with the concept or basis of the application, you have to admit it generated plenty of buzz about the brand within its core demographic, and got its name into their hands through their cell phones. It isn’t a new concept (young people going out looking for others) and isn’t going away anytime soon; however, making it blatantly obvious through a worldwide company isn’t the best approach. Maybe Pepsi was banking that its woman consumers wouldn’t figure out the link to its Amp product.

    Another MNB user wrote:

    Give me a break! Women are engaged in this “ Kind of Discourse” every day. Look at the cover of Cosmo, hit their online site and tell me what you see. Now what do you have to say about all the advertisers that promote their products monthly in that magazine?

    Did you even take a look at the app to see what is about?

    I hope Pepsi doesn’t take it down, apparently it is on the “edge of the road” not the “middle of road” that you now get run over! Funny how you conveniently view things...where’s your balance?

    Well, excuuuuuse me.

    Yes, I looked at it. I am no less appalled. I would be appalled if my daughter went out with someone who used the app, and I’d be equally appalled if I found out that my sons were using it.

    This has nothing to do with me not being balanced. It has to do with common sense. Edgy is one thing, but this is off the cliff.

    Another MNB user wrote:

    Just had to throw my 2 cents in on this Pepsi App.  I am absolutely horrified and cannot believe a team of professionals would believe this is either appropriate or funny.  I volunteer for a local agency supporting victims of Sexual Assault, and one of our key objectives is to educate men and women on safe, healthy and respectful dating practices.  Women are not objects or categories and “humor” like this serves only to perpetuate negative stereotypes and damaging behavior.   This isn’t political correctness talking; its common sense and respect.  There is no excuse for this; Pepsi should be ashamed here and act immediately to take down this app.

    And still another MNB user wrote:

    I’d really like to see a list of the things Indra Nooyi has done well at Pepsi.  I know people who know her and have great things to say about her.  I don’t follow the company that closely, but with things like this and the Peter Arnell/breathtaking Tropicana  debacle, she does not come off looking so good.

    Responding to Michael Sansolo’s column earlier this week, MNB user Thomas D. Murphy wrote:

    As a long-time IT executive, I would like to side with Michael’s perspective from FMI Future Connect, that “IT is not the problem”.  Of course, if IT is not the problem, then the business must be the problem.  However, I can’t side with either of these arguments as it is not an “either/or” situation.  In my 35+ years of experience, the problem is two-fold: 1) generally poor communication and 2) inability of each party to understand the needs/problems of the other from the other’s perspective (as Michael noted).

    If these problems did not exist, my financial existence as a grocery industry IT consultant would be KAPUT!  In most of my engagements, I work with business and IT executives to improve communications, facilitate understanding and align business strategies with IT strategies.  I am always amazed by how little both parties tend to effectively communicate until they are locked in a room with a common objective barring their exit!  A common enemy, the competition or “the old way of doing things” usually breaks down the barrier.  The business always wonders why IT can’t install a system quickly (as if they – the business - can locate land and build a store quickly!) while IT wonders why the business can’t describe everything they want and all current and future business rules (IT calls these “specifications”).  Fact is, this will never change from either perspective.  Only communication and understanding can solve this problem – and it usually takes a 3rd party to bring this about.

    I also got a number of emails yesterday following the departure of CEO Eric Claus from A&P, suggesting that it was too bad that Jim Donald had taken the top job at Haggen...since as the former CEO of Pathmark (now owned by A&P), he’d be perfect to replace Claus.

    To which I would respond: I wouldn’t wish that job on anyone. If Eric Claus couldn’t make it work, I don’t know who could.

    Besides, I’m half convinced that A&P is either going to be sold, or that Pathmark will be sold off. Because it certainly can’t be business as usual there, especially because from what I hear, the staff in Montvale is pretty devastated.
    KC's View:

    Published on: October 22, 2009

    The Philadelphia Phillies defeated the Los Angeles Dodgers 10-4, winning the National League Championship Series 4-1 and earning the right to go to the World Series, where they will play either the Los Angeles Angels or the New York Yankees.
    KC's View:
    Hate to say it, but since the New York Yankees have a 3-1 lead in the best-of-seven American League Championship Series, it looks like this will be a Jersey Turnpike series...and that the players and spectators will be bundling up for the inevitable cold late October weather.